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September 18, 2017 | Payroll Software | Posted by Ascentis

Preparing for Payroll Year-End: Tax and Report Fringe Benefits

Make sure you are taxing fringe benefits correctly before year-end

Whether you’ve given your employee's standard fringe benefits like group-term life insurance, or perhaps benefits beyond the basics, like employer-provided vehicles, meal expenses, or recognition awards, the IRS requires you to tax employees and contractors for these benefits. With payroll year-end approaching, now is the time to audit your accounts payable and general ledger to find, and ultimately tax, those unreported taxable fringe benefits from 2017.

Taxable fringe benefits for tax year 2017 include, but are not limited to:

  • Benefits that exceed monetary thresholds—dependent care assistance in excess of $5,000, group-term life insurance in excess of $50,000, educational assistance in excess of $5,250;
  • Expense reimbursements or payments made to third-parties for non-qualifed moving expenses
  • Meal expenses employees incurred while traveling
  • Employer-paid student loan payments
  • The fair market value of individual gym memberships, regardless of any applicable corporate discount
  • The fair market value of health benefits provided to employees’ domestic partners or civil union partners of either gender
  • Dependent group-term life insurance, when the policy exceeds $2,000
  • Group-term life insurance greater than $50,000 provided to retirees
  • Employee recognition awards that are more than de minimis benefits (e.g., all-expense-paid
  • trips, gift certificates)
  • Employee safety awards, prizes, referral bonuses and suggestion awards
  • Employees’ personal use of company vehicles.

 

Don't Delay Your Payroll Year-End Planning. Get Ready Now and Download the Free Comprehensive Year-End Payroll Checklist.

 Our year end HR checklist offers payroll professionals an overview of the most critical year-end activities and recommended best practices to support year-end planning and new year strategic initiatives. In this free downloadable checklist you’ll get guidance on: 
  • Verifying employee data accuracy
  • Deceased and terminated employees
  • Form W-4 for 2017
  • Employee misclassifications
  • Pay equity law compliance
  • Tracking and reporting fringe benefits
  • ACA filing and reporting
  • And much more!

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